Democrats and Republicans have been unable to agree on a deficit reduction plan ahead of the August 2 deadline, but Senator Kent Conrad, D-N.D., on Wednesday said both sides will not let the U.S. default.

"Leadership on both sides understand it would be catastrophic to default, so I think we will avoid that," Conrad told Cramer, adding that debt reduction should be the government's main priority. "We've got to get our debt under control. Just extending the debt limit is important, but at the end of the day it's not sufficient."

Conrad said lawmakers should make changes to the government's spending habits and revenue streams, but didn't elaborate. To get anything done, Conrad said Congress will need to overcome "very deep" and "very serious" partisanship. He said much of Washington is involved in political theater, including some who can't "differentiate theater from reality."

"Let's hope that enough of them recognize the reality of our current condition and step up to the plate and do what has to be done, which means all of us have to give some ground here. All of us have to move off our fixed positions," Conrad said. "I hope we can persuade our colleagues in these hours ahead, now is the time."

Chairman of the Senate Budget Committee, Conrad is also part of the "Gang of Six," a bipartisan group of senators behind a $3.71 trillion deficit-reduction plan. To see the full interview, watch the video.